Senate GOP kills tax on oil windfall

The outcome of the vote was hardly a surprise. Democrats knew they probably couldn't overcome a Republican filibuster on a plan to tax billions of dollars in windfall profits by the country's biggest oil companies.

Still, plenty of anger was on display. After all, the bill was meant to respond to what has the nation fuming – gas costing $4 a gallon and rising.

Democratic leaders fell nine votes short of the 60 needed to take up the energy package. Its centerpiece was a 25 percent tax on Big Oil's windfall profits and the stripping away of tax breaks the oil companies have enjoyed. The tax could be avoided if the money were put into alternative fuel projects.

Shortly after the oil tax vote, Republicans blocked a second proposal that would extend tax breaks that have either expired or are scheduled to end this year for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. Again Democrats couldn't get the 60 votes to overcome a GOP filibuster.

“The American people must be wondering what in God's name is going on in their nation's capital,” proclaimed Sen. Bernie Sanders, an independent from Vermont. Expensive gasoline is sending economic waves across the country, threatening everything from summer vacations to Meals on Wheels deliveries.

Republican senators argued that punishing big oil companies won't do a thing to lower prices at the pump. They also said it could curtail domestic oil production and maybe even cause prices to go up, not down.

On world markets, oil prices retreated a bit Tuesday but remained above $131 a barrel. Gasoline prices edged even higher to a nationwide record average of $4.04 a gallon. In the Charlotte area, the average price was $3.98 Tuesday, up from $3.65 a month ago, according to AAA.

The proposed windfall tax would have been triggered on any “unreasonable” profits of the five largest U.S. oil companies, which together made $36 billion during the first three months of the year.

The bill also would have given the government more power to address oil market speculation, opened the way for antitrust actions against countries belonging to the OPEC oil cartel, and made energy price gouging a federal crime.

Democratic leaders needed 60 votes and they got only 51 senators' support, including seven Republicans who bucked their party leaders. Sen. Mary Landrieu of Louisiana, a state tied closely to the oil industry, was the only Democrat opposing the bill.

Sens. Elizabeth Dole, R-N.C., Richard Burr, R-N.C., and Jim DeMint, R-S.C., opposed the bill. Sen. Lindsey Graham, R-S.C., did not vote.

“Americans are furious about what's going on,” declared Sen. Byron Dorgan, D-N.D. He said they want Congress to do something about oil company profits and the “orgy of speculation” on oil markets.

But Republican leaders said little was to be gained by imposing new taxes on the five U.S. oil giants: Exxon Mobil, Chevron, Shell Oil, BP America and ConocoPhilips. While these companies may be huge, they don't set world oil prices and raising their taxes would discourage domestic oil production, the Republicans said of the Democrats' plan

“In the middle of what some are calling the biggest energy shock in a generation … they proposed as a solution, of all things, a windfall profits tax,” Republican leader Mitch McConnell of Kentucky chided the Democrats.

Neither the presumptive Republican presidential candidate, John McCain, nor his Democratic rival, Sen. Barack Obama, were in Washington to cast votes on the energy issue Tuesday.